Beef needs to carve premium niche

There is a lot of beef out there and nobody wants to pay any more than they have to

THE perennial question for the beef industry has become “how do we improve prices?”.

Why, when the dollar has softened, there is strong global demand for protein and our herd is rapidly shrinking, do producers struggle to attract a price that reflects what their product is worth, relative to the cost of production and today’s cost of living?

There is a lot of beef out there and nobody wants to pay any more than they have to.

We are highly exposed to this through our “level playing field” position and the effects are made worse by our cost of production when our competitors are either subsidised, have cheap labour, or both.

We need to be selling a product recognised as premium and worth paying for.

So can the Global Roundtable on Sustainable Beef’s plan of a verification system to guarantee our sustainability help prices and our image?

It might give us a marketing edge that underscores our clean, green image, and therefore retain market share.

But politics seems to play a bigger role in market share, as seen with recent free trade agreements (such as the US and Korea) and declining market share, despite our traceability edge.

It’s possible that for entry into some markets this could become a “must have”, like being free of hormone growth promotants in some regions.

But will other countries take it seriously? After all, our National Livestock Identification System traceability hasn’t helped our market share.

And do enough markets exist that are willing to pay substantially more for a product verified as sustainably produced for us to be able to cash in?

In 2013, the markets that drove export volumes were China, the Middle East and the US.

These markets’ buying decisions are being made on price and balance of trade, not whether the herds the beef is from are doing something to save the Great Barrier Reef.

And while the beef herds of Queensland, in particular the Fitzroy River region, might have a handy marketing edge in being able to say they’re using 'reef safe' practices, what widely recognised and globally marketable cause can the rest of the country’s beef industry hang its hat on?

TheLand
Andrew Norris

Andrew Norris

is the editor of The Land
Date: Newest first | Oldest first

READER COMMENTS

Sir Les P
27/03/2014 3:33:08 AM

How to get to the bottom of meat prices/a Senate Inquiry & give the ACCC power to go into processors books to see what is happening.
qld mum
27/03/2014 4:06:32 AM

Transparency. We need transparency in the prices paid and made, right through the chain. Our beef business does make a profit (0ver long term, balancing good years over bad) and we have suffered the worst of flood and drought in past few years. But the 'robbery' of prices in this past 12 months has prompted us to tell our adult kids that we give the industry 3 years to get it's ##** together with paying a fair price as against cost of production or we will leave a very well honed business and invest in something else. I won't work our family into the ground for blessed all return.
The Serf
27/03/2014 5:39:48 AM

Simply diversify your cattle marketing away from domestic meat production into exporting the live cattle nationally. Develop a strategy that disconnects supply away from Australian abattoirs and develop a policy that says if the Australian consumer is not prepared to pay inflated meat prices to match their inflated incomes then we will sell to someone overseas. The world is starving for meat, look at China!! RMAC would have to be repealed, its the cause of why we must accept these less than 3rd world prices domestically; because the Processors control RMAC and we finance that control!!
Tigerdicky
27/03/2014 5:58:29 AM

Such a profound statement! It just confirms what journos do know what they are talking about!
GFA
27/03/2014 6:29:04 AM

Australia has for far too long, turned a blind eye to our burgeoning internal subsidy system of industrial awards. If we couldn't see it before, surely the departure of so many major manufacturers from Aust in recent years must now highlight our failure to compete on international or domestic markets because of our subsidies to labor. Our meat (processing) industry is just another casualty. While removing industrial award regulations may not totally fix our industry, there is certainly no reason why it should not be reformed so at least we can stand a chance of competing.
hunter
27/03/2014 6:27:35 PM

good article Andrew, hit the nail on the head. Look at Aussie beef prices vs the rest of the world and it doesn't make sense. If we could freely export our beef US consumers would be better off as would Aussie producers.
Rob Moore
28/03/2014 1:20:51 PM

Qld Mum- spot on -transparency and equal access to supply a specs offer by way of a forward contract simply makes COMPETITION which will raise prices. Serf makes good points and when feeder ,live ex and kill livestock are all competing for farmgate supply.. well that is as good as it will ever get! The simple trade practice act -the PPP will just like the ASX- make a visible record of prices and volumes that are traded in advance. The offered price will draw the product- not the product finding a mystery price. This would fix and apply to ALL Primary Production Pricing (PPP)=market barometer
warrumbungler
29/03/2014 6:31:39 AM

GFA is spot on and it applies to over the top salaries as well as wages.
Logic
29/03/2014 7:12:48 PM

Supply and demand. Last 12 months oversupply, next 12 months under supply and prices will jump. It has always happened that way and will always continue to do so. Fiddling with regular Action will not help.
GFA
31/03/2014 8:15:55 AM

warrumbungler, Yes, correct. I agree that too many executive salary packages are way over the top too. Not sure how you attack them however as they are reportedly market based or supply demand based! Clearly a lot of Boards or Authorities that sign off on the executive salaries have a lot to answer for.
1 | 2  |  next >
A matter of opinionA selection of editorials from around the Fairfax Agricultural Media group covering the issues of the week.

COMMENTS

light grey arrow
I'm one of the people who want marijuana to be legalized, some city have been approved it but
light grey arrow
#blueysmegacarshowandcruise2019 10 years on Daniels Ute will be apart of another massive cause.
light grey arrow
Australia's live animal trade is nothing but a blood stained industry that suits those who